The IMC issued its 15th report

It follows an Independent Monitoring Commission finding that UDA and UVF members were still involved in crime.

The paramilitary watchdog said it was time for the UVF leadership to show courage to point it in a new direction.

Meanwhile, PUP leader Dawn Purvis has met Taoiseach Bertie Ahern for talks in Dublin.

Afterwards, Ms Purvis said loyalist paramilitaries would "not be found wanting" if there was a stable devolved government.

"It is vital that with a new assembly, there is nothing to destabilise it," she said.

"The leadership of the UVF and the Red Hand Command want political stability and accountable democracy in Northern Ireland."

She said Mr Ahern had given a commitment "of continued engagement with loyalism and with the PUP".

Earlier, the commissioners said the Provisional IRA has not engaged in any terrorist or crime since its last report.

However, they warned that dissident republican groups such as the Real IRA, Continuity IRA and Oglaigh na hEireann continued to pose a threat.

This latest report, the IMC's 15th, covers the three-month period from December 2006 to February 2007.

I think it's very important that loyalism gets in to the mainstream because otherwise it will get left behind Peter Hain NI secretary

It found that while the UDA did not engage in terrorist, racial or sectarian violence, senior members were involved in black market activity.

UDA members also took part in extortion, drug dealing and loan sharking, the commissioners found, although they noted signs that such activity was beginning to drop off in some areas.

On the UVF, the commission said it was not involved in terrorist activity and had tried to address the problem of racial crime during the period under review.

While the UVF did not carry out robberies or attempt to acquire weapons, the commission noted: "Individual members were involved in serious crime, mainly for personal gain, including extortion and counterfeiting.

"There has, however, been further evidence of a reduction in the amount of drug dealing by members, in terms of both its scale and geographical spread."

Dawn Purvis met Mr Ahern in Dublin

The UVF leadership, the commissioners said, was keen to reduce the size of the organisation and to restructure it.

The IMC believes the Loyalist Volunteer Force is now a criminal concern involved in drug dealing and counterfeit money, using the proceeds of crime for personal gain.

Mr Hain told the Commons: "Gangsterism and the remnants of paramilitary activity amongst loyalist groups including the UDA are completely unacceptable.

"I think it's very important that loyalism gets in to the mainstream because otherwise it will get left behind.

"And the last thing that loyalist community needs is to be further isolated because there are those within it who cling to the past.